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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  J Sainsbury    SBRY   GB00B019KW72

J SAINSBURY

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J Sainsbury : Walmart mulls stock market listing for UK arm Asda

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05/14/2019 | 07:57pm EDT
FILE PHOTO - Shopping trolleys are seen outside a branch of ASDA in Altrincham.

LONDON (Reuters) - Walmart, the world's biggest retailer, said it is considering a stock market listing for its British supermarket arm Asda, whose attempt to combine with rival Sainsbury's was blocked by the UK regulator last month.

Judith McKenna, the Walmart International CEO, told Asda managers at an event in Leeds, northern England, on Tuesday: "While we are not rushing into anything, I want you to know that we are seriously considering a path to an IPO - a public listing - to strengthen your long-term success."

But she cautioned that any preparations for an IPO would "take years", according to comments released by Asda afterwards.

Britain's competition regulator ruled Sainsbury's 7.3 billion pound ($9.4 billion) takeover of Asda could not proceed, blocking one potential exit route for Walmart from the UK.

The decision prompted analysts to speculate that Walmart would try to sell Asda to private equity or consider a stock market listing for the business, which it paid 6.7 billion pounds to acquire in 1999.

McKenna's comments are the first time Walmart has publicly addressed its future strategy for Asda since the Sainsbury's deal collapsed.

"Walmart does not have a one-size-fits-all approach to operating its international markets, but a consistent focus on strong local businesses powered by Walmart," she said.

Asda has reported seven consecutive quarters of like-for-like sales growth thanks to a strategy focused on lower prices, more innovation in own-brand products, better store standards and improvements in its e-commerce operations.

Monthly industry data produced by researcher Kantar indicates that Asda will likely report an eighth quarter of growth when it updates on trading on Thursday.

CEO Roger Burnley told managers at the Leeds meeting there would be 80 million pounds of price cuts throughout the rest of 2019.

Asda's strategy is working, he said, but noted it would be harder to deliver the strategy at the same pace without the synergies that the Sainsbury's deal would have provided.

(Reporting by James Davey; Editing by Sonya Hepinstall)

Stocks mentioned in the article
ChangeLast1st jan.
J SAINSBURY 0.13% 195.3 Delayed Quote.-26.30%
WAL-MART STORES 0.80% 102.67 Delayed Quote.10.22%
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Financials (GBP)
Sales 2020 29 223 M
EBIT 2020 727 M
Net income 2020 482 M
Debt 2020 1 223 M
Yield 2020 5,63%
P/E ratio 2020 9,67
P/E ratio 2021 9,19
EV / Sales 2020 0,19x
EV / Sales 2021 0,18x
Capitalization 4 311 M
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Mean consensus HOLD
Number of Analysts 16
Average target price 2,43  GBP
Spread / Average Target 24%
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Managers
NameTitle
Michael Andrew Coupe Chief Executive Officer & Executive Director
David Alan Tyler Chairman
Simon John Roberts Director-Retail & Operations
Kevin O'Byrne Chief Financial Officer & Director
Richard Philip Newsome Director-Digital & Technology
Sector and Competitors
1st jan.Capitalization (M$)
J SAINSBURY-26.30%5 480
WAL-MART STORES10.22%294 368
ALIMENTATION COUCHE-TARD INC24.41%35 514
SM INVESTMENTS CORPORATION--.--%21 287
CARREFOUR11.87%14 747
YONGHUI SUPERSTORES CO., LTD25.92%13 746